WSM - RH risks to the downside send Wedbush to sidelines ahead of earnings

RH (NYSE:RH +3.8%) is not an ideal pick ahead of earnings, according to Wedbush analyst Seth Basham. “Headwinds have grown since the company’s [fourth quarter] earnings report on March 29 when the company delivered somber news of a 1000-1200 bps slowdown in demand growth in the four weeks following the start of the Ukraine War and 2022 guidance below expectations,” he explained.  Basham added that shifting consumer preferences and increased spending on experiences and travel rather than goods bode poorly for the upscale lifestyle brand. Further, sticker shock amid inflationary impacts might cause many potential purchases to be pushed off as buyers “balk at outsized price increases.” As a result, Basham expects revenue in-line with the analyst consensus with risks to the downside on guidance as supply chain problems persist. With 34% of its products sourced from China, the lockdown risk for the retailer is certainly pronounced. The retailer might

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RH risks to the downside send Wedbush to sidelines ahead of earnings